Kempen Non-Directional Partnership - Class A

Profile

Kempen Non-Directional Partnership (KNDP) is a fund-of-hedge-funds with a diversified exposure to hedge fund strategies. The portfolio typically consists of 10 to 20 underlying hedge funds. The fund has an unconstrained mandate and can invest in a wide array of primarily non-directional strategies, ranging from relative value strategies (e.g. arbitrage and long/short equity with limited directionality) to event driven strategies. The fund can invest in all asset classes and the structure of the fund also allows for investments in less liquid opportunities like distressed debt.

Hedge funds are sourced through an extensive industry network that shares a preference for focused, independent investment managers above the larger traditional asset managers. The concentrated investment approach allows for a thorough due diligence process that is executed by an experienced and specialized team. The members of the Investment Committee have an average industry experience of over twenty years.

The objective of the fund is to generate a long-term return in excess of Euribor + 2%.

Performance per 2017-12-31 (rebased)

Performance per 2017-12-31

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Fund

1 month

0.6%

3 months

0.8%

This year

6.2%

2014

2.3%

2015

-0.4%

2016

3.6%

3 years (on annual basis)i

3.1%

5 years (on annual basis)i

3.9%

Since inception (on annual basis)i

2.8%

Till May 2006 the portfolio consisted of fund-of-hedgefunds and as of May 2006 the portfolio consists of direct investments in hedge funds. Performance is shown after deduction of ongoing charges. The value of your investments may fluctuate. Past performance provides no guarantee for the future.

Key figures

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Total fund size

EUR117.67 M2017-12-31

Number of shares

379,7372017-12-31

Net Asset Valuei

EUR17.792018-01-31

Kempen Non-Directional Partnership (the Sub-Fund) is a sub-fund of Kempen Alternative Investment Fund Sicav (the â€œFundâ€), domiciled in Luxembourg. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Sub-Fund is registered under the license of the Fund at the The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents of the Fund are available on the website of KCM (www.kempen.com/investmentfunds). The Subfonds is registered for offering in a limited number of countries. The countries where the subfund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

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Market developments per 2017-12-31

In Q4-2017, KNDP (Class B) produced a return of +0.9% versus reference indices that were +0.8% (HFRX Global Hedge Fund EUR Index, â€˜HFRXâ€™), +5.0% (MSCI World, TR, hedged to EUR), and +0.6% (Citigroup WGBI EMU Govt, TR, EUR). This brought YTD returns to +6.3%, +3.5%, +17.5%, and +1.7% respectively. Full-year performance was achieved with limited risk and it was broad-based with no detractors and the list of top-5 contributors including four different strategies. On a 5-yearsâ€™ basis, KNDP produced a net return of +4.1% above Euribor with an equity beta of 0.17; in line with the long-term target to generate a net return of more than Euribor + 2% with an equity beta of less than 0.15.

More information can be found in the Investment Letter on the documents page of this fund.

Portfolio developments per 2017-12-31

The final quarter of the year was an active one in terms of portfolio activity. We redeemed two managers (Magnetar PRA and Jet Capital) while we added two new managers (Diameter and Aeolus). Magnetar PRA is a systematic merger arbitrage manager and we redeemed this investment for (the combination of) two reasons. First, whilst merger arbitrage spreads were very wide when we first invested in this fund in early 2016, spreads have since tightened considerably and to a level where forward-looking returns were no longer as attractive. Second, following Northtrop Grummanâ€™s announced bid on Orbital ATK, the latter company automatically entered Magnetarâ€™s portfolio. This is a company that is part of the industry chain that can produce cluster munition, a segment that we prefer not to have exposure to for ESG reasons. Should the risk/reward for merger arbitrage improve and Orbital ATK no longer form part of the portfolio, we could re-enter this fund and therefore it remains on our approved list. When we first invested in Jet Capital at the start of 2015, we did so as we liked their sole focus on processdriven investments with catalysts involving a legal, regulatory or transactional process. This made it a differentiated strategy as their edge did not rely on pure market or valuation factors. Over the past three years, there have been fewer pure process-driven investments in the portfolio making it less differentiated. Additionally, the opportunity set for their strategy (including merger arb) seems less rich today. Over the three year investment period, the annualized return was +2.1%.

In the Q3-2017 Investment Letter we wrote about the opportunity set for Insurance Linked Securities (â€˜ILSâ€™) and that we had scheduled on-site visits with the key players in this market during October in order to determine whether we should re-enter ILS. These visits led us to believe that pricing of natural catastrophe property risk during the January renewal season will improve to the extent that ILS has become an attractive strategy again, especially in those contracts that are geared to the most loss-affected areas. These contracts are paying out substantial amounts to help repair the damage done by the 2017 hurricane season and in return pricing will likely normalize to levels where they are commensurate to the risks. Based on our on-site visits and subsequent detailed due diligence, we came to the conclusion that Aeolus is our preferred manager. Aeolus is an ILS specialist that was founded in 2006 and aspects that we like about them are that (a) it is run by an experienced team who have worked together for over a decade, (b) they are focused both in terms of strategy and product offering, (c) they have exhibited capacity-awareness by limiting asset growth in times when the prospects for the strategy were less compelling, (d) they focus on and tailor their portfolio to the most interesting risk/reward part of ILS, (e) they actively look for shorts in mispriced of the ILS market which makes the portfolio more robust for a heavy natural catastrophe season, and (f) they have built best in class proprietary modelling software. We also added Diameter to the portfolio. This long / short credit manager was founded in 2017 by former investment professionals of blue chip credit / distressed firms and we have come to known them whilst they were still in these roles. At Diameter, they will be investing globally with a focus on the US and Europe, and predominantly in performing and stressed credit. Their smaller fund size (circa $1bn at the start of 2018) allows them to be more flexible in their allocations and run with more meaningful individual short positions where credit spreads are too tight in light of fundamentals. As early stage investors in the fund, we have secured favourable founderâ€™s fee terms. During the quarter look-through net equity exposure declined from 15% to 13%, while the look-through net corporate credit exposure (HY equivalent) declined from 11% to 7%. Note that the portfolioâ€™s net equity exposure comes from Credit / Distressed managersâ€™ post-reorganization equity exposure (typically lower beta) and Macro / Systematic managers (typically quick to change positioning when warranted by the market environment).

More information can be found in the Investment Letter on the documents page of this fund.

Kempen Non-Directional Partnership (the Sub-Fund) is a sub-fund of Kempen Alternative Investment Fund Sicav (the â€œFundâ€), domiciled in Luxembourg. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Sub-Fund is registered under the license of the Fund at the The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents of the Fund are available on the website of KCM (www.kempen.com/investmentfunds). The Subfonds is registered for offering in a limited number of countries. The countries where the subfund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Performance per 2017-12-31 (rebased)

Performance per 2017-12-31

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Fund

1 month

0.6%

3 months

0.8%

This year

6.2%

2014

2.3%

2015

-0.4%

2016

3.6%

3 years (on annual basis)i

3.1%

5 years (on annual basis)i

3.9%

Since inception (on annual basis)i

2.8%

Till May 2006 the portfolio consisted of fund-of-hedgefunds and as of May 2006 the portfolio consists of direct investments in hedge funds. Performance is shown after deduction of ongoing charges. The value of your investments may fluctuate. Past performance provides no guarantee for the future.

Dividends

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Distributing

No

Risk analysis (ex post) per 2017-12-31

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3 years

Since inception

Maximum drawdowni

-5.10%

-22.95%

Tracking errori

2.10%

Information ratioi

1.54

Betai

0.57

Kempen Non-Directional Partnership (the Sub-Fund) is a sub-fund of Kempen Alternative Investment Fund Sicav (the â€œFundâ€), domiciled in Luxembourg. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Sub-Fund is registered under the license of the Fund at the The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents of the Fund are available on the website of KCM (www.kempen.com/investmentfunds). The Subfonds is registered for offering in a limited number of countries. The countries where the subfund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

More information?

More information can be found in the the document Facts and Figures on the Documents page of this fund.

Kempen Non-Directional Partnership (the Sub-Fund) is a sub-fund of Kempen Alternative Investment Fund Sicav (the â€œFundâ€), domiciled in Luxembourg. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Sub-Fund is registered under the license of the Fund at the The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents of the Fund are available on the website of KCM (www.kempen.com/investmentfunds). The Subfonds is registered for offering in a limited number of countries. The countries where the subfund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

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Ongoing charges

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Management feei

0.75%

Service feei

0.08%

Taxe d'abonnementi

0.05%

Indirect costsi

1,94% (estimate excl. possible performance fees)

Ongoing charges last financial yeari

2.82%

Other costs

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Entry fee

0,00 %

Exit fee

0,50 %

Kempen Non-Directional Partnership (the Sub-Fund) is a sub-fund of Kempen Alternative Investment Fund Sicav (the â€œFundâ€), domiciled in Luxembourg. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Sub-Fund is registered under the license of the Fund at the The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents of the Fund are available on the website of KCM (www.kempen.com/investmentfunds). The Subfonds is registered for offering in a limited number of countries. The countries where the subfund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

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Share class details

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Share class

Ai

Investor type

Institutional & Private

Distributing

No

Reference indexi

HFRX GI Hedge Fund EUR

Objective

To generate a long term return in excess of Euribor +2%

Investment category

Hedge Fund Solutions

Universum

Global multi assets

Inception date

2001-10-01

Domicile

Luxembourg

May be offered to all investors in

The Netherlands

May be offered to professional investors only in

Luxembourg, United Kingdom

UCITS statusi

No

Status

Open-endi

Base currency

EUR

Share class currency

EUR

Management company

Kempen Capital Management N.V.

Custodian

J.P. Morgan Bank Luxembourg S.A.

Tradability

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Listed

no

Subscription/Redemption Frequency

Subscriptions monthly on the first business day, redemptions quarterly, on the first business day of January, April, July and October

ISINi

LU0138381354

Entry period purchase order

In order to be executed, orders must be received by J.P. Morgan Bank Luxembourg S.A. 5 business days before the dealing day. Your distributor may use longer entry periods.

Entry period sell order

In order to be executed, orders must be received by J.P. Morgan Bank Luxembourg S.A. 90 calendar days before the dealing day.Your distributor may use longer entry periods.

Details

Settlement for subcriptions is due 5 business days before the applicable dealing day. Settlement for redemption will normally take place within 19 business days after the appllicable dealing day.

Kempen Non-Directional Partnership (the Sub-Fund) is a sub-fund of Kempen Alternative Investment Fund Sicav (the â€œFundâ€), domiciled in Luxembourg. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Sub-Fund is registered under the license of the Fund at the The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents of the Fund are available on the website of KCM (www.kempen.com/investmentfunds). The Subfonds is registered for offering in a limited number of countries. The countries where the subfund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Formal documents other

Other

Kempen Non-Directional Partnership (the Sub-Fund) is a sub-fund of Kempen Alternative Investment Fund Sicav (the â€œFundâ€), domiciled in Luxembourg. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Sub-Fund is registered under the license of the Fund at the The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents of the Fund are available on the website of KCM (www.kempen.com/investmentfunds). The Subfonds is registered for offering in a limited number of countries. The countries where the subfund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

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KCM Vision

Kempen Capital Management is an asset manager with a long-term investment approach.
We strongly believe in engaged shareholdership that benefits all stakeholders. As
a long-term responsible investor, we firmly believe that active ownership and
shareholder engagement contribute to positive change across the board.

Our KCM wide approach to responsible investment

To put our vision into action we engage with our investment targets on a wide
array of strategic, financial, environmental, social and governance (ESG) topics.
Our long-term investment worldview paired with thorough analysis and an
experienced and diverse ESG team allow us to use both voting and engagement as
means to consistently encourage positive change. Through this process of
constructive engagement, we are able to contribute to the development of
principles and standards of corporate responsibility within companies that we invest in.

Our fund approach to Responsible Investment

As we invest in hedge funds, we don't actively choose to invest in a certain company.

During our thorough due diligence process we ask managers what efforts they make regarding responsible investing.

Also, we check on as annual basis whether our funds have any exposure to the companies on our exclusion list.

We hope that by continuing to ask our managers about their ESG and RI policy, they will start considering formulating an RI policy especially if faced with similar queries from other investors.

When a manager is or becomes a signatory or informs us about aRI policy they are using, we open a dialogue to discuss the topic and find out what drove them to their current RI stance.

Kempen Non-Directional Partnership (the Sub-Fund) is a sub-fund of Kempen Alternative Investment Fund Sicav (the â€œFundâ€), domiciled in Luxembourg. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Sub-Fund is registered under the license of the Fund at the The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents of the Fund are available on the website of KCM (www.kempen.com/investmentfunds). The Subfonds is registered for offering in a limited number of countries. The countries where the subfund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future.